Equity Residential (EQR ) today reported results for the quarter
and six months ended June 30, 2017. All per share results are reported
as available to common shares/units on a diluted basis.

"Strong and steady demand for rental housing in our gateway, coastal
markets continues to drive high occupancy, retention and renewal pricing
despite elevated levels of new supply," said David J. Neithercut, Equity
Residentials President and CEO. "We are pleased to now expect full year
same store revenue growth towards the upper end of our original guidance
driven by Seattle, San Francisco and New York City which should meet our
most optimistic projections for the year. This, combined with slightly
higher than expected expense growth, should produce same store net
operating income growth for the year in the upper half of our original
range of expectations."

Second Quarter 2017

Earnings Per Share (EPS) for the second quarter of 2017 was $0.53
compared to $0.59 in the second quarter of 2016. The difference is due
primarily to higher property sale gains in the second quarter of 2017,
the various adjustment items listed on page 24 of this release and the
items described below.

FFO (Funds from Operations), as defined by the National Association of
Real Estate Investment Trusts (NAREIT), was $0.77 per share for the
second quarter of 2017 compared to $0.90 per share in the second quarter
of 2016. The difference is due primarily to the various adjustment items
listed on page 24 of this release and the items described below.

Normalized FFO for the second quarter of 2017 was $0.77 per share
compared to $0.76 per share in the second quarter of 2016. The following
items impacted Normalized FFO per share in the quarter:

--
A positive impact of approximately $0.01 per share from increased same
store net operating income (NOI);

--
A positive impact of approximately $0.02 per share from Lease-Up NOI;

--
A positive impact of approximately $0.01 per share from lower
corporate overhead (property management and general and administrative
expenses);

--
A negative impact of approximately $0.01 per share from higher
interest expense; and

--
A negative impact of approximately $0.02 per share of lower NOI
primarily as a result of the Companys 2016 disposition activity.

Reconciliations and definitions of FFO and Normalized FFO are provided
on pages 6, 27 and 28 of this release and the Company has included
guidance for Normalized FFO on page 25 and FFO and EPS on page 28 of
this release.

Six Months Ended June 30, 2017

EPS for the six months ended June 30, 2017 was $0.92 compared to $10.36
in the six months ended June 30, 2016. The difference is due primarily
to $9.58 per share in higher property sale gains as a result of the
Companys significant property sales activity in 2016, the various
adjustment items listed on page 24 of this release and the items
described below.

FFO was $1.53 per share for the six months ended June 30, 2017 compared
to $1.37 per share for the six months ended June 30, 2016. The
difference is due primarily to the various adjustment items listed on
page 24 of this release and the items described below.

Normalized FFO for the six months ended June 30, 2017 was $1.51 per
share compared to $1.52 per share for the six months ended June 30,
2016. The following items impacted Normalized FFO per share in the
period:

--
A positive impact of approximately $0.03 per share from increased same
store NOI;

--
A positive impact of approximately $0.05 per share from Lease-Up NOI;

--
A positive impact of approximately $0.02 per share from lower
corporate overhead (property management and general and administrative
expenses);

--
A negative impact of approximately $0.02 per share from higher
interest expense and lower interest and other income due to the impact
of the high cash balances the Company carried in 2016; and

--
A negative impact of approximately $0.09 per share of lower NOI
primarily as a result of the Companys 2016 disposition activity.

Same Store Results

On a same store second quarter to second quarter comparison, which
includes 71,354 apartment units, revenues increased 2.1%, expenses
increased 4.1% and NOI increased 1.3%. Average Rental Rate increased
2.5% and occupancy decreased 0.4% to 95.8%.

During the second quarter of 2017, the Company acquired one consolidated
apartment property in Seattle, consisting of 136 apartment units, for a
purchase price of approximately $57.0 million at an Acquisition
Capitalization Rate of 5.0%. Also during the second quarter, the Company
sold two consolidated apartment properties, consisting of 600 apartment
units, for an aggregate sale price of approximately $219.1 million at a
weighted average Disposition Yield of 5.0% and generating an Unlevered
IRR of 12.5%. Also during the quarter, the Company stabilized its
348-unit 340 Fremont development in San Francisco at a Development Yield
of 4.7%.

In the first six months of 2017, the Company acquired the apartment
property described above and sold three consolidated apartment
properties, consisting of 904 apartment units, for an aggregate sale
price of approximately $266.7 million at a weighted average Disposition
Yield of 5.3% and generating an Unlevered IRR of 14.1%. During the first
six months of 2017, the Company also sold one land parcel located in New
York City for a sale price of approximately $33.5 million.

Third Quarter 2017 Guidance

The Company has established an EPS guidance range of $0.47 to $0.51 for
the third quarter of 2017. The difference between the Companys second
quarter 2017 EPS of $0.53 and the midpoint of the third quarter 2017
guidance range of $0.49 is due primarily to lower expected gains on
property sales and the items described below.

The Company has established an FFO guidance range of $0.77 to $0.81 per
share for the third quarter of 2017. The difference between the
Companys second quarter 2017 FFO of $0.77 per share and the midpoint of
the third quarter 2017 guidance range of $0.79 per share is due
primarily to the items described below.

The Company has established a Normalized FFO guidance range of $0.77 to
$0.81 per share for the third quarter of 2017. The difference between
the Companys second quarter 2017 Normalized FFO of $0.77 per share and
the midpoint of the third quarter 2017 guidance range of $0.79 per share
is due primarily to:

--
A positive impact of approximately $0.01 per share from increased same
store NOI;

--
A positive impact of approximately $0.01 per share from Lease-Up NOI;

--
A positive impact of approximately $0.01 per share from lower
corporate overhead (property management and general and administrative
expenses); and

--
A negative impact of approximately $0.01 per share of lower NOI
primarily as a result of the Companys 2017 transaction activity.

Full Year 2017 Guidance

The Company has revised its guidance for its full year 2017 same store
operating performance, EPS, FFO per share, Normalized FFO per share and
transactions as listed below:

The change in the full year EPS guidance range is due primarily to lower
expected gains on property sales and the items described below.

The change in the full year FFO and Normalized FFO per share guidance
ranges is due primarily to an anticipated increase in same store NOI.

Glossary of Terms and Definitions

To improve comparability and enhance disclosure, the Company has a
glossary of defined terms and related reconciliations of Non-GAAP
financial measures on pages 26 through 29 of this release.

Third Quarter 2017 Earnings and Conference Call

Equity Residential expects to announce third quarter 2017 results on
Tuesday, October 24, 2017 and host a conference call to discuss those
results at 10:00 a.m. CT on Wednesday, October 25, 2017.

About Equity Residential

Equity Residential is an S&P 500 company focused on the acquisition,
development and management of rental apartment properties in urban and
high-density suburban coastal gateway markets where todays renters want
to live, work and play. Equity Residential owns or has investments in
301 properties consisting of 77,034 apartment units, primarily located
in Boston, New York, Washington, D.C., Seattle, San Francisco and
Southern California. For more information on Equity Residential, please
visit our website at www.equityapartments.com.

Forward-Looking Statements

In addition to historical information, this press release contains
forward-looking statements and information within the meaning of the
federal securities laws. These statements are based on current
expectations, estimates, projections and assumptions made by management.
While Equity Residentials management believes the assumptions
underlying its forward-looking statements are reasonable, such
information is inherently subject to uncertainties and may involve
certain risks, including, without limitation, changes in general market
conditions, including the rate of job growth and cost of labor and
construction material, the level of new multifamily construction and
development, competition and local government regulation. Other risks
and uncertainties are described under the heading "Risk Factors" in our
Annual Report on Form 10-K and subsequent periodic reports filed with
the Securities and Exchange Commission (SEC) and available on our
website, www.equityapartments.com.
Many of these uncertainties and risks are difficult to predict and
beyond managements control. Forward-looking statements are not
guarantees of future performance, results or events. Equity Residential
assumes no obligation to update or supplement forward-looking statements
that become untrue because of subsequent events.

A live web cast of the Companys conference call discussing these
results will take place tomorrow, Wednesday, July 26, at 10:00 a.m.
Central. Please visit the Investor section of the Companys web
site at www.equityapartments.com
for the link. A replay of the web cast will be available for two
weeks at this site.

Note: See page 24 for additional detail regarding the adjustments
from FFO to Normalized FFO. See pages 26 through 29 for the definitions
of non-GAAP financial measures and other terms as well as the
reconciliations of EPS to FFO per share and Normalized FFO per share.

(1) Net of the effect of any derivative instruments. Weighted average
rates are for the six months ended June 30, 2017.
(2) Fair value interest rate swaps convert the $450.0 million 2.375%
notes due July 1, 2019 to a floating interest rate of 90-Day LIBOR
plus 0.61%.
(3) The Companys $2.0 billion unsecured revolving credit facility
matures January 10, 2022. The interest rate on advances under the
credit facility will generally be LIBOR plus a spread (currently
0.825%), or based on bids received from the lending group, and an
annual facility fee (currently 12.5 basis points). Both the spread
and the facility fee are dependent on the credit rating of the
Companys long-term debt. As of June 30, 2017, there was
approximately $1.22 billion available on the Companys unsecured
revolving credit facility (net of $12.1 million which was
restricted/dedicated to support letters of credit, net of $265.0
million outstanding on the revolving credit facility and net of
$500.0 million in principal outstanding on the commercial paper
program).
(4) The Company may borrow up to a maximum of $500.0 million on the
commercial paper program subject to market conditions. The notes
bear interest at various floating rates with a weighted average of
1.31% for the six months ended June 30, 2017 and a weighted average
maturity of 30 days as of June 30, 2017.
Note: The Company capitalized interest of approximately $16.6
million and $28.4 million during the six months ended June 30, 2017
and 2016, respectively. The Company capitalized interest of
approximately $8.4 million and $14.2 million during the quarters
ended June 30, 2017 and 2016, respectively.

(1) Net of the effect of any derivative instruments. Weighted average
rates are as of June 30, 2017.
(2) Includes $500.0 million in principal outstanding on the Companys
commercial paper program.
(3) Includes a $500.0 million 5.19% mortgage loan with a maturity date
of October 1, 2019 that can be prepaid at par beginning October 1,
2018.
(4) Includes a $550.0 million 6.08% mortgage loan with a maturity date
of March 1, 2020 that can be prepaid at par beginning March 1, 2019.
Also includes a $500.0 million 5.78% mortgage loan with a maturity
date of July 1, 2020 that can be prepaid at par beginning July 1,
2019.
(5) Includes $265.0 million outstanding on the Companys unsecured
revolving credit facility.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Equity Residential
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Selected Unsecured Public Debt Covenants
June 30, March 31,
2017 2017
------------------------------------------------ ------------------------------------------
Total Debt to Adjusted Total Assets (not to exceed 60%) 35.0% 35.1%
Secured Debt to Adjusted Total Assets (not to exceed 40%) 14.6% 14.8%
Consolidated Income Available for Debt Service to 4.20 3.96
Maximum Annual Service Charges
(must be at least 1.5 to 1)
Total Unsecured Assets to Unsecured Debt 378.3% 377.6%
(must be at least 150%)

Note: These selected covenants relate to ERP Operating Limited
Partnerships ("ERPOP") outstanding unsecured public debt, which
represent the Companys most restrictive covenants. Equity Residential
is the general partner of ERPOP.

Note: All development projects listed are wholly owned by the
Company.
(1) Properties included here are substantially complete. However, they
may still require additional exterior and interior work for all
apartment units to be available for leasing.

(1) Total Apartment Units - Excludes 945 unconsolidated apartment units
for which repairs and maintenance expenses and capital expenditures
to real estate are self-funded and do not consolidate into the
Companys results.
(2) Repairs and Maintenance Expenses - Includes general maintenance
costs, apartment unit turnover costs including interior painting,
routine landscaping, security, exterminating, fire protection, snow
removal, elevator, roof and parking lot repairs and other
miscellaneous building repair and maintenance costs.
(3) Maintenance Payroll - Includes payroll and related expenses for
maintenance staff.
(4) Replacements - Includes new expenditures inside the apartment units
such as appliances, mechanical equipment, fixtures and flooring,
including carpeting. Replacements for same store properties also
include $22.0 million spent during the six months ended June 30,
2017 on apartment unit renovations/rehabs (primarily kitchens and
baths) on approximately 1,650 same store apartment units (equating
to approximately $13,300 per apartment unit rehabbed) designed to
reposition these units for higher rental levels in their respective
markets. During 2017, the Company expects to spend approximately
$50.0 million for unit renovation/rehab costs on same store
properties at an average cost of $11,000 per apartment unit rehabbed.
(5) Building Improvements - Includes roof replacement, paving, amenities
and common areas, building mechanical equipment systems, exterior
painting and siding, major landscaping, vehicles and office and
maintenance equipment.
(6) Per apartment unit amounts are based on a weighted average of 5,421
apartment units.
(7) Other - Primarily includes expenditures for properties sold and
properties under development.
(8) The Company estimates that during 2017 it will spend approximately
$2,600 per apartment unit of capital expenditures, inclusive of
apartment unit renovation/rehab costs, or $1,900 per apartment unit
excluding apartment unit renovation/rehab costs. These estimates
include approximately $17.0 million or approximately $250 per
apartment unit of additional expenditures for resident focused
renovation projects such as common areas and fitness centers in
order to remain competitive with the new luxury supply being
delivered in many of our markets.

Note: See pages 26 through 29 for the definitions of non-GAAP financial
measures and other terms as well as the reconciliations of EPS to FFO
per share and Normalized FFO per share.

------------------------------------------------------------------
Equity Residential
Normalized FFO Guidance and Assumptions
------------------------------------------------------------------
The guidance/projections provided below are based on current
expectations and are forward-looking. All guidance is given on a
Normalized FFO basis. Therefore, certain items excluded from
Normalized FFO, such as debt extinguishment costs/prepayment
penalties and the write-off of pursuit costs, are not included in
the estimates provided on this page. See pages 26 through 29 for
the definitions of non-GAAP financial measures and other terms as
well as the reconciliations of EPS to FFO per share and Normalized
FFO per share.

Note: Approximately 25 basis point change in NOI percentage = $0.01 per
share change in EPS/FFO per share/Normalized FFO per share.

2017 Transaction Assumptions
---------------------------------------------------------------------------------------------------------------------
Consolidated rental acquisitions $500.0 million
Consolidated rental dispositions $500.0 million
Spread between Acquisition Cap Rate and Disposition Yield 50 basis points
2017 Debt Assumptions
---------------------------------------------------------------------------------------------------------------------
Weighted average debt outstanding $8.9 billion to $9.1 billion
Weighted average interest rate (reduced for capitalized interest) 4.13%
Interest expense, net (on a Normalized FFO basis) $367.6 million to $375.8 million
Capitalized interest $24.0 million to $28.0 million
2017 Other Guidance Assumptions
---------------------------------------------------------------------------------------------------------------------
Property management expense $83.0 million to $85.0 million
General and administrative expense (see Note below) $50.0 million to $52.0 million
Interest and other income $1.0 million
Income and other tax expense $1.0 million
Debt offerings $400.0 million to $600.0 million
Equity ATM share offerings No amounts budgeted
Preferred share offerings No amounts budgeted
Weighted average Common Shares and Units - Diluted 382.8 million

Note: Normalized FFO guidance excludes a duplicative charge of
approximately $0.4 million, which will be recorded to general and
administrative expense, related to the overlap of accounting costs for
the Companys current and former executive compensation programs.

------------------------------------------------------------------------------
Equity Residential
Additional Reconciliations and Definitions of Non-GAAP Financial
Measures and Other Terms
(Amounts in thousands except per share and per apartment unit data)
(All per share data is diluted)
------------------------------------------------------------------------------
This Earnings Release and Supplemental Information includes
certain non-GAAP financial measures and other terms that
management believes are helpful in understanding our business. The
definitions and calculations of these non-GAAP financial measures
and other terms may differ from the definitions and methodologies
used by other REITs and, accordingly, may not be comparable. These
non-GAAP financial measures should not be considered as an
alternative to net earnings or any other GAAP measurement of
performance or as an alternative to cash flows from specific
operating, investing or financing activities. Furthermore, these
non-GAAP financial measures are not intended to be a measure of
cash flow or liquidity.
Acquisition Capitalization Rate or Cap Rate - NOI that the
Company anticipates receiving in the next 12 months (or the year
two or three stabilized NOI for properties that are in lease-up at
acquisition) less an estimate of property management
costs/management fees allocated to the project (generally ranging
from 2.0% to 4.0% of revenues depending on the size and income
streams of the asset) and less an estimate for in-the-unit
replacement capital expenditures (generally ranging from $100-$450
per apartment unit depending on the age and condition of the
asset) divided by the gross purchase price of the asset. The
weighted average Acquisition Cap Rate for acquired properties is
weighted based on the projected NOI streams and the relative
purchase price for each respective property.
Average Rental Rate - Total residential rental
revenues reflected on a straight-line basis in accordance with
GAAP divided by the weighted average occupied apartment units for
the reporting period presented.
Debt Covenant Compliance - Our unsecured debt includes
certain financial and operating covenants including, among other
things, maintenance of certain financial ratios. These provisions
are contained in the indentures applicable to each notes payable
or the credit agreement for our line of credit. The Debt Covenant
Compliance ratios that are provided show the Companys compliance
with certain covenants governing our public unsecured debt. These
covenants generally reflect our most restrictive financial
covenants. The Company was in compliance with its unsecured debt
covenants for all years presented (the ratios should not be used
for any other purpose, including without limitation, to evaluate
the Companys financial condition or results of operations, nor do
they indicate the Companys covenant compliance as of any other
date or for any other period).
Development Yield - NOI that the Company anticipates
receiving in the next 12 months following stabilization less an
estimate of property management costs/management fees allocated to
the project (generally ranging from 2.0% to 4.0% of revenues
depending on the size and income streams of the asset) and less an
estimate for in-the-unit replacement capital expenditures
(generally ranging from $50-$150 per apartment unit depending on
the type of asset) divided by the Total Capital Cost of the asset.
The weighted average Development Yield for development properties
is weighted based on the projected NOI streams and the relative
Total Capital Cost for each respective property.
Disposition Yield - NOI that the Company anticipates giving
up in the next 12 months less an estimate of property management
costs/management fees allocated to the project (generally ranging
from 2.0% to 4.0% of revenues depending on the size and income
streams of the asset) and less an estimate for in-the-unit
replacement capital expenditures (generally ranging from $100-$450
per apartment unit depending on the age and condition of the
asset) divided by the gross sale price of the asset. The weighted
average Disposition Yield for sold properties is weighted based on
the projected NOI streams and the relative sales price for each
respective property.
Earnings Per Share ("EPS") - Net income
per share calculated in accordance with GAAP. Expected EPS is
calculated on a basis consistent with actual EPS. Due to the
uncertain timing and extent of property dispositions and the
resulting gains/losses on sales, actual EPS could differ
materially from expected EPS.
Economic Gain - Economic Gain is calculated as the net gain
on sales of real estate properties in accordance with GAAP,
excluding accumulated depreciation. The Company generally
considers Economic Gain to be an appropriate supplemental measure
to net gain on sales of real estate properties in accordance with
GAAP because it is one indication of the gross value created by
the Companys acquisition, development, rehab, management and
ultimate sale of a property and because it helps investors to
understand the relationship between the cash proceeds from a sale
and the cash invested in the sold property. The following table
presents a reconciliation of net gain on sales of real estate
properties in accordance with GAAP to Economic Gain:

-----------------------------------------------------------------------------------------------------------------------------
Equity Residential
Additional Reconciliations and Definitions of Non-GAAP
Financial Measures and Other Terms - Continued
(Amounts in thousands except per share and per apartment unit data)
(All per share data is diluted)
-----------------------------------------------------------------------------------------------------------------------------
Funds From Operations and Normalized
Funds From Operations:
-----------------------------------------------------------------------------------------------------------------------------
Funds From Operations ("FFO") - The National Association of
Real Estate Investment Trusts ("NAREIT") defines FFO (April 2002
White Paper) as net income (computed in accordance with accounting
principles generally accepted in the United States ("GAAP")),
excluding gains (or losses) from sales and impairment write-downs
of depreciable operating properties, plus depreciation and
amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect
funds from operations on the same basis. The April 2002 White
Paper states that gain or loss on sales of property is excluded
from FFO for previously depreciated operating properties only.
Expected FFO per share is calculated on a basis consistent with
actual FFO per share and is considered an appropriate supplemental
measure of expected operating performance when compared to
expected EPS.
The Company believes that FFO and FFO available to Common Shares
and Units are helpful to investors as supplemental measures of the
operating performance of a real estate company, because they are
recognized measures of performance by the real estate industry and
by excluding gains or losses related to dispositions of
depreciable property and excluding real estate depreciation (which
can vary among owners of identical assets in similar condition
based on historical cost accounting and useful life estimates),
FFO and FFO available to Common Shares and Units can help compare
the operating performance of a companys real estate between
periods or as compared to different companies.
Normalized Funds From Operations ("Normalized FFO")
- Normalized FFO begins with FFO and excludes:
? the impact of any expenses relating to non-operating asset
impairment and valuation allowances;
? pursuit cost write-offs;
? gains and losses from early debt extinguishment, including
prepayment penalties, preferred share redemptions and the cost
related to the implied option value of non-cash convertible debt
discounts;
? gains and losses on the sales of non-operating assets, including
gains and losses from land parcel sales, net of the effect of
income tax benefits or expenses; and
? other miscellaneous items.
Expected Normalized FFO per share is calculated on a basis
consistent with actual Normalized FFO per share and is considered
an appropriate supplemental measure of expected operating
performance when compared to expected EPS.
The Company believes that Normalized FFO and Normalized FFO
available to Common Shares and Units are helpful to investors as
supplemental measures of the operating performance of a real
estate company because they allow investors to compare the
Companys operating performance to its performance in prior
reporting periods and to the operating performance of other real
estate companies without the effect of items that by their nature
are not comparable from period to period and tend to obscure the
Companys actual operating results.
FFO, FFO available to Common Shares and Units, Normalized FFO and
Normalized FFO available to Common Shares and Units do not
represent net income, net income available to Common Shares or net
cash flows from operating activities in accordance with GAAP.
Therefore, FFO, FFO available to Common Shares and Units,
Normalized FFO and Normalized FFO available to Common Shares and
Units should not be exclusively considered as alternatives to net
income, net income available to Common Shares or net cash flows
from operating activities as determined by GAAP or as a measure of
liquidity. The Companys calculation of FFO, FFO available to
Common Shares and Units, Normalized FFO and Normalized FFO
available to Common Shares and Units may differ from other real
estate companies due to, among other items, variations in cost
capitalization policies for capital expenditures and, accordingly,
may not be comparable to such other real estate companies.
FFO available to Common Shares and Units and Normalized FFO
available to Common Shares and Units are calculated on a basis
consistent with net income available to Common Shares and reflects
adjustments to net income for preferred distributions and premiums
on redemption of preferred shares in accordance with GAAP. The
equity positions of various individuals and entities that
contributed their properties to the Operating Partnership in
exchange for OP Units are collectively referred to as the
"Noncontrolling Interests - Operating Partnership". Subject to
certain restrictions, the Noncontrolling Interests - Operating
Partnership may exchange their OP Units for Common Shares on a
one-for-one basis.

-------------------------------------------------------------------
Equity Residential
Additional Reconciliations and Definitions of Non-GAAP
Financial Measures and Other Terms - Continued
(Amounts in thousands except per share and per apartment unit data)
(All per share data is diluted)
-------------------------------------------------------------------
The following table presents reconciliations of EPS to FFO per
share and Normalized FFO per share for pages 6 and 25 (the
expected guidance/projections provided below are based on current
expectations and are forward-looking):

Lease-Up NOI - Represents NOI for development properties: (i) in
various stages of lease-up; and (ii) where lease-up has been completed
but the properties were not stabilized (defined as having achieved 90%
occupancy for three consecutive months) for all of the current and
comparable periods presented.

Net Operating Income ("NOI") - NOI is the Companys primary
financial measure for evaluating each of its apartment properties. NOI
is defined as rental income less direct property operating expenses
(including real estate taxes and insurance). The Company believes that
NOI is helpful to investors as a supplemental measure of its operating
performance because it is a direct measure of the actual operating
results of the Companys apartment properties. NOI does not include an
allocation of property management expenses either in the current or
comparable periods. Rental income for all leases and operating expense
for ground leases (for both same store and non-same store properties)
are reflected on a straight-line basis in accordance with GAAP for the
current and comparable periods.

The following tables present reconciliations of operating income per the
consolidated statements of operations to NOI, along with rental income,
operating expenses and NOI per the consolidated statements of operations
allocated between same store and non-same store results (see page 10):

---------------------------------------------------------------------------------------------------------------------------
Equity Residential
Additional Reconciliations and Definitions of Non-GAAP
Financial Measures and Other Terms - Continued
(Amounts in thousands except per share and per apartment unit data)
(All per share data is diluted)
---------------------------------------------------------------------------------------------------------------------------
Non-Same Store Properties - For annual comparisons,
primarily includes all properties acquired during 2016 and 2017,
plus any properties in lease-up and not stabilized as of January
1, 2016.
Normalized Earnings Before Interest, Income Taxes, Depreciation
and Amortization ("EBITDA") - Represents net
income in accordance with GAAP before interest expense, income
taxes, depreciation expense and amortization expense and further
adjusted for non-comparable items. Normalized EBITDA, total debt
to Normalized EBITDA and net debt to Normalized EBITDA are
important metrics in evaluating the credit strength of the Company
and its ability to service its debt obligations. The Company
believes that Normalized EBITDA, total debt to Normalized EBITDA
and net debt to Normalized EBITDA are useful to investors,
creditors and rating agencies because they allow investors to
compare the Companys credit strength to prior reporting periods
and to other companies without the effect of items that by their
nature are not comparable from period to period and tend to
obscure the Companys actual credit quality.
Physical Occupancy - The weighted average occupied
apartment units for the reporting period divided by the average of
total apartment units available for rent for the reporting period.
Same Store Properties - For annual comparisons, primarily
includes all properties acquired or completed that are stabilized
prior to January 1, 2016, less properties subsequently sold.
Properties are included in Same Store when they are stabilized for
all of the current and comparable periods presented.
% of Stabilized NOI - Represents budgeted 2017 NOI for
stabilized properties and projected annual NOI at stabilization
(defined as having achieved 90% occupancy for three consecutive
months) for properties that are in lease-up.
Total Capital Cost - Estimated cost for projects under
development and/or developed and all capitalized costs incurred to
date plus any estimates of costs remaining to be funded for all
projects, including land acquisition costs, construction costs,
capitalized real estate taxes and insurance, capitalized interest
and loan fees, permits, professional fees, allocated development
overhead and other regulatory fees, all in accordance with GAAP.
Total Market Capitalization - The aggregate of the market
value of the Companys outstanding common shares, including
restricted shares, the market value of the Companys operating
partnership units outstanding, including restricted units (based
on the market value of the Companys common shares) and the
outstanding principal balance of debt. The Company believes this
is a useful measure of a real estate operating companys long-term
liquidity and balance sheet strength, because it shows an
approximate relationship between a companys total debt and the
current total market value of its assets based on the current
price at which the Companys common shares trade. However, because
this measure of leverage changes with fluctuations in the
Companys share price, which occur regularly, this measure may
change even when the Companys earnings, interest and debt levels
remain stable.
Turnover - Total residential move-outs divided by
total residential apartment units, including inter-property and
intra-property transfers.
Unencumbered NOI % - Represents NOI generated by
consolidated real estate assets unencumbered by outstanding
secured debt as a percentage of total NOI generated by all of the
Companys consolidated real estate assets.
Unlevered Internal Rate of Return ("IRR") - The Unlevered
IRR on sold properties is the compound annual rate of return
calculated by the Company based on the timing and amount of: (i)
the gross purchase price of the property plus any direct
acquisition costs incurred by the Company; (ii) total revenues
earned during the Companys ownership period; (iii) total direct
property operating expenses (including real estate taxes and
insurance) incurred during the Companys ownership period; (iv)
capital expenditures incurred during the Companys ownership
period; and (v) the gross sales price of the property net of
selling costs. Each of the items (i) through (v) is calculated in
accordance with GAAP.
The calculation of the Unlevered IRR does not include an
adjustment for the Companys general and administrative expense,
interest expense (including loan assumption costs and other
loan-related costs) or property management expense. Therefore, the
Unlevered IRR is not a substitute for net income as a measure of
our performance. Management believes that the Unlevered IRR
achieved during the period a property is owned by the Company is
useful because it is one indication of the gross value created by
the Companys acquisition, development, rehab, management and
ultimate sale of a property, before the impact of Company
overhead. The Unlevered IRR achieved on the properties as cited in
this release should not be viewed as an indication of the gross
value created with respect to other properties owned by the
Company, and the Company does not represent that it will achieve
similar Unlevered IRRs upon the disposition of other properties.
The weighted average Unlevered IRR for sold properties is weighted
based on all cash flows over the investment period for each
respective property, including net sales proceeds.